Skillz FY2024 Q3 Earnings Release

Nov, 2024 UNIT ED S T A T ES
SE C URIT IE S A ND E X CH ANG E C O M MIS SIO N
W ash in gto n , D .C . 2 0549

F O RM 8 -K

C URREN T R EPO RT
PU RSU ANT T O S E C TIO N 1 3 O R 1 5(d ) O F T H E
SE C URIT IE S E X CH ANG E A CT O F 1 934

D ate o f R ep ort ( D ate o f e arlie st e v en t r e p orte d ): N ovem ber 7 , 2 024

SKILLZ INC.
(E xact n am e o f r e g is tr a n t a s s p ecif ie d i n i ts c h arte r)
D ela w are 0 01-3 9243 84-4 478274
(S ta te o r o th er j u ris d ic tio n
of i n co rp ora tio n)
(C om mis sio n
F ile N um ber)
(IR S E m plo yer
Id en tif ic atio n N o.)
6 625 B ad ura A ven ue
L as V eg as, N ev ad a 8 911 8
(A ddre ss o f p rin cip al e x ecu tiv e o ff ic es, i n clu din g z ip c o de)

R eg is tr a n t’s t e le p hone n um ber, i n clu din g a re a c o d e: ( 4 15) 7 62-0 511

N ot A pplic a b le
( F orm er n am e o r f o rm er a d dre ss, i f c h an ged s in ce l a st r e p ort)

C heck th e a p pro pria te b ox b elo w if th e F orm 8 -K filin g is in te n ded to sim ulta n eo usly sa tis fy th e filin g o blig atio n o f th e re g is tr a n t u nder a n y o f th e
fo llo w in g p ro vis io ns:

☐ W ritte n c o m munic atio ns p urs u an t t o R ule 4 25 u n der t h e S ecu ritie s A ct ( 1 7 C FR 2 30.4 25)

☐ S olic itin g m ate ria l p urs u an t t o R ule 1 4a-1 2 u nder t h e E xch an ge A ct ( 1 7 C FR 2 40.1 4a-1 2)

☐ P re -c o m men cem en t c o m munic atio ns p urs u an t t o R ule 1 4d-2 (b ) u nder t h e E xch an ge A ct ( 1 7 C FR 2 40.1 4d-2 (b ))

☐ P re -c o m men cem en t c o m munic atio ns p urs u an t t o R ule 1 3e-4 (c ) u nder t h e E xch an ge A ct ( 1 7 C FR 2 40.1 3e-4 (c ))

S ecu ritie s r e g is te re d p urs u an t t o S ectio n 1 2(b ) o f t h e A ct:
T it le o f e a ch c la ss T ra d in g S ym bol( s )
N am e o f e a ch e x ch an ge o n w hic h
re g is te re d
C la ss A c o m mon s to ck , p ar v alu e $ 0.0 001 p er s h are S K LZ N YSE

In dic ate b y c h eck m ark w heth er th e r e g is tr a n t is a n e m erg in g g ro w th c o m pan y a s d efin ed in R ule 4 05 o f th e S ecu ritie s A ct o f 1 933 ( § 230.4 05 o f th is c h ap te r)
o r R ule 1 2b-2 o f t h e S ecu ritie s E xch an ge A ct o f 1 934 ( § 240.1 2b-2 o f t h is c h ap te r).

E m erg in g g ro w th c o m pan y ☐

If a n e m erg in g g ro w th c o m pan y, in dic ate b y c h eck m ark if th e r e g is tr a n t h as e le cte d n ot to u se th e e x te n ded tr a n sitio n p erio d f o r c o m ply in g w ith a n y n ew o r
re v is e d f in an cia l a cco untin g s ta n dard s p ro vid ed p urs u an t t o S ectio n 1 3(a ) o f t h e E xch an ge A ct. ☐

Ite m 2 .0 2. R esu lt s o f O pera tio n s a n d F in an cia l C on dit io n .

O n N ovem ber 7 , 2 024, S killz I n c. ( th e ” C om pan y”) is su ed a p re ss r e le ase a n nouncin g its f in an cia l r e su lts f o r th e th ir d q uarte r e n ded S ep te m ber 3 0,
2 024. A c o py o f t h e p re ss r e le ase i s a tta ch ed h ere to a s E xhib it 9 9.1 a n d i n co rp ora te d b y r e fe re n ce h ere in .
T he in fo rm atio n c o nta in ed in E xh ib it 9 9.1 s h all n ot b e d eem ed “ file d ” fo r p urp ose s o f S ectio n 1 8 o f th e S ecu ritie s E xch ange A ct o f 1 934, a s a m en ded (th e
“ E xch ange A ct” ), o r i n co rp ora te d b y r e fe re n ce i n a ny f ilin g u nder t h e S ecu ritie s A ct o f 1 933, a s a m en ded , o r t h e E xch ange A ct, e xcep t a s s h all b e e xp re ssly s e t
fo rth b y s p ecific r e fe re n ce i n s u ch a f ilin g.
Ite m 9 .0 1. F in an cia l S ta te m en ts a n d E xh ib it s .

(d ) E xhib its .

E xh ib it N um ber D esc rip tio n
99.1 P re ss R ele ase , d ate d N ovem ber 7 , 2 024
104 C over P ag e I n te ra ctiv e D ata F ile ( e m bed ded w ith in t h e I n lin e X BRL d ocu m en t)

SIG NAT U RES

Purs u an t to th e re q uir e m en ts o f th e S ecu ritie s E xch an ge A ct o f 1 934, th e re g is tr a n t h as d uly c au se d th is re p ort to b e s ig ned o n its b eh alf b y th e
u nders ig ned h ere u nto d uly a u th oriz ed .

S K IL LZ I N C.

By: /s / N ik ul P ate l
N am e: N ik ul P ate l
T itle : In te rim G en era l C ounse l

D ate : N ovem ber 7 , 2 024

Skillz A nnounces T hir d Q uarte r 2 024 R es u lt s
L A S V EG AS–(B U SIN ESS W IR E), N ove m be r 7 , 2 024– S killz In c. ( N YSE: S KLZ ) ( “S killz ” o r th e “ C om pany”), th e le adin g m obile g am es p la tfo rm
b rin gin g fa ir c o m petit io n to p la ye rs w orld w id e , to day r e porte d u naudit e d fin ancia l r e su lt s fo r th e th ir d q uarte r e nded S epte m ber 3 0, 2 024.
T hir d Q uarte r F in an cia l U pdate ( U nau dit e d ):
• R eve nue o f $ 24.6 m illio n.
• N et lo ss o f $ 21.1 m illio n.
• A dju ste d E BIT D A o f $ (1 3.9 ) m illio n.
• P ayin g m onth ly a ctiv e u se rs ( P M AU ) o f 1 21,0 00.
• A ve ra ge R eve nue P er P ayin g M onth ly A ctiv e U se r ( A R PPU ) o f $ 67.6 .
• To ta l o pera tin g e xp ense s e xclu din g c o st o f r e ve nue o f $ 42.2 m illio n.
“O ur th ir d q uarte r o pe ra tin g p erfo rm ance w as m ark e d b y c o ntin ued e xe cu tio n o n o u r s tr a te gic o pera tin g p rio rit ie s a s w e fu rth er p osit io n S killz to
g enera te s u sta in able to p-lin e g ro w th a nd p osit iv e c a sh flo w ,” s a id A nd re w P ara dis e , S killz ’ C EO . “ P ayin g M onth ly A ve ra ge U se rs ( p M AU ) in th e
quarte r w as s ta ble o n a q uarte rly s e quentia l b asis . B y fo cu sin g o ur c u sto m er a cq uis it io n s p end o n ta rg ete d c h annels w e a gain a ch ie ve d s yste m –
wid e p ayb ack a ppro ach in g s ix m onth s. W e a re o ptim is tic th at c o ntin ued e xe cu tio n o n o ur s tr a te gic in it ia tiv e s w ill p osit io n S killz to g enera te
p osit iv e A dju ste d E BIT D A o n a r u n-ra te b asis in 2 025.”
G aeta no F ra nce sch i, S killz ’ C FO , a dded, “O ur fo cu s o n d is cip lin ed o pera tin g e xp ense m anagem ent, in clu din g o n u se r a cq uis it io n s p end to
e nsu re w e a ch ie ve e xp ecte d s yste m -w id e p ayb ack, c o ntin ues to d riv e y e ar o ve r y e ar im pro ve m ents in o ur A dju ste d E BIT D A lo ss a nd o ur
quarte rly c a sh b urn . O ur s tr o ng b ala nce s h ee t, in clu din g m ore th an $ 300 m illio n in c a sh a nd r e str ic te d c a sh a s o f S epte m ber 3 0, 2 024, p ro vid es
us w it h th e fle xib ilit y to d eplo y c a pit a l o n o u r tu rn aro und in it ia tiv e s s u ch a s th e d eve lo pm ent a nd in tr o ductio n o f n ew p ro duct fe atu re s, a s w ell a s
to b egin to tr a nsit io n to w ard in cre asin g o ur u se r a cq uis it io n s p end to g enera te p ro fit a ble g ro w th .”
In vesto r C onfe re n ce C all
S killz w ill h ost a liv e c o nfe re nce c a ll a t 4 :3 0 p .m . E T to day. T o a cce ss th e c a ll, p le ase r e gis te r u sin g th e fo llo w in g lin k:
https://www .netroadshow .com/events/login?show=4fd50b1c&confId=71853 . Afte r r e gis te rin g, a n e m ail w ill b e s e nt, in clu din g d ia l-
in d eta ils a nd a u niq ue c o nfe re nce c a ll a cce ss c o de a nd P IN r e quir e d to jo in th e liv e c a ll. A cce ss to th e liv e a udio w ebca st o f th e d is cu ssio n in
lis te n-o nly m ode w ill a ls o b e a va ila ble a t in ve sto rs .s killz .c o m
A re pla y o f th e w ebca st w ill b e a rc h iv e d o n th e C om pany’s in ve sto r re la tio ns w ebsit e . A n a udio re pla y o f th e c o nfe re nce c a ll w ill b e a va ila ble
t h ro ugh T hurs d ay, N ove m ber 1 4, 2 024, a nd c a n b e a cce sse d b y d ia lin g ( 8 66) 8 1 3-9 403 ( U S) o r ( 9 29) 4 58-6 194 ( in te rn atio nal) a nd e nte rin g th e
passco de 4 13242.
A bout S killz In c.
S killz is th e le adin g m obile g am es p la tfo rm d e dic a te d to b rin gin g o u t th e b e st in e ve ry o ne th ro ugh c o m petit io n. T he S killz p la tfo rm h elp s
deve lo pers c re ate m ult i- m illio n d olla r fr a nch is e s b y e nablin g s o cia l c o m petit io n in th eir g am es. L eve ra gin g it s p ate nte d te ch nolo gy, S killz h osts
b illio ns o f c a su al e S ports to urn am ents fo r m illio n s o f m obile p la ye rs w orld w id e , w it h th e g oal o f b uild in g th e h om e o f c o m petit io n fo r a ll. S killz h as
earn ed re co gnit io n a s o ne o f F ast C om pany’s B est W ork p la ce s fo r In nova to rs , C NBC ’s D is ru pto r 5 0, F orb es’ N ext B illio n-D olla r S ta rtu ps, F ast
C om pany’s M ost In nova tiv e C om panie s, a n d th e n um ber-o ne fa ste st- g ro w in g c o m pany in A m eric a o n th e In c. 5 000. w ww.s killz .c o m
1
2
3
1. A dju ste d E BIT D A is a n on-G AAP m etr ic ; fo r a r e co ncilia tio n o f e ach m ea su re a gain st it s m ost c o m pa ra ble G AAP m etr ic , p le ase s e e th e s e ctio n tit le d “ U se o f N on-G AAP F in ancia l
M easu re s” in th is p re ss r e le ase .
2. “ P ayin g M onth ly A ctiv e U se rs ” o r “ P M AU s” m eans th e n um be r o f e nd-u se rs w ho e nte re d in to a p aid c o n te st h oste d o n S killz ’s p la tfo rm a t le ast o nce in a m onth , a ve ra ged o ve r
each m onth in th e p erio d.
3. “ A ve ra ge R eve nue P er P ayin g M onth ly A ctiv e U se r” o r “ A R PPU ” m ea ns th e a ve ra ge r e ve n ue in a g iv e n m on th d iv id ed b y P ayin g M AU s in th at m onth , a ve ra ged o ve r th e p erio d
and d oes n ot in clu de a d eductio n fo r e nd-u se r in ce ntiv e s th at a re in clu ded in s a le s a nd m ark e tin g e xp e nse .

Use o f N on-G AAP F in an cia l M easu re s
In th is p re ss re le ase , th e C om pany in clu des A dju ste d E BIT D A, w hic h is a n on-G AAP p erfo rm ance m easu re th at th e C om pany u se s to
s u pple m ent it s r e su lt s p re se nte d in a cco rd an ce w it h U .S . G AAP. T he C om pany’s m anagem ent b elie ve s A dju ste d E BIT D A is u se fu l in e va lu atin g
it s o pera tin g p erfo rm ance a nd is a s im ila r m easu re re porte d b y p ublic ly -lis te d U .S . c o m petit o rs , a nd re gula rly u se d b y s e cu rit ie s a naly sts ,
in stit u tio nal in ve sto rs , a nd o th er in te re ste d p artie s in a naly zin g o pera tin g p erfo rm ance a nd p ro sp ects . B y p ro vid in g th is n on-G AAP m easu re , th e
C om pany’s m anagem ent in te nds to p ro vid e in ve sto rs w it h a m eanin gfu l, c o nsis te nt c o m paris o n o f th e C om pany’s p ro fit a bilit y fo r th e p erio ds
pre se nte d. N on-G AAP o pera tin g e xp ense s a re a ls o in clu ded in th is p re ss re le ase , w hic h a re a n on-G AAP fin ancia l m easu re s. T he C om pany’s
m anagem ent b elie ve s n on-G AAP o pera tin g e xp ense s a re u se fu l to in ve sto rs a nd a naly sts a s a s u pple m ent to it s fin ancia l in fo rm atio n p re pare d
in a cc o rd ance w it h G AA P fo r a naly zin g o pera tin g p e rfo rm ance a n d id e ntif y in g o p era tin g tr e nds in it s b usin ess. T he C om pany u se s n on-G AAP
opera tin g e xp ense s in te rn ally to fa cilit a te p e rio d-to -p erio d c o m paris o ns a nd a naly sis in o rd er to m ake o pera tin g d ecis io ns. A s re quir e d b y th e
ru le s o f th e S EC , th e C om pany h as p ro vid ed h ere in a r e co ncilia tio n o f A dju ste d E BIT D A a nd n on-G AAP o pera tin g e xp ense s to th e m ost d ir e ctly
c o m para ble m easu re s u nder G AAP. A dju ste d E BIT D A a n d n o n-G AAP o p era tin g e xp ense a re n ot in te nded to b e s u bstit u te s fo r a ny U .S . G AAP
fin ancia l m easu re s a nd, a s c a lc u la te d, m ay n ot b e c o m para ble to o th er s im ila rly tit le d fin ancia l m easu re s o f o th er c o m panie s in o th er in dustr ie s
or w it h in th e s a m e in dustr y .
T he C om pany defin es and ca lc u la te s A dju ste d E BIT D A as net lo ss befo re in te re st in co m e (e xp ense ), net; pro vis io n fo r in co m e ta xe s;
d epre cia tio n a nd a m ortiz a tio n, a nd o th er in co m e, n e t; a s fu rth er a d ju ste d fo r s to ck-b ase d c o m pensa tio n a nd o th er s p ecia l it e m s d ete rm in ed b y
m anagem ent, in clu din g , b ut n ot lim it e d to , c h ange in fa ir v a lu e o f c o m mon s to ck w arra nt lia bilit ie s, im pair m ent c h arg es, lo ss c o ntin gency
a ccru als , a nd o ne-tim e n onre cu rrin g e xp ense s. T he C om pany d efin es a nd c a lc u la te s n on-G AAP o pera tin g e xp ense a s G AAP o pera tin g e xp ense
a dju ste d fo r s to ck-b ase d c o m pensa tio n, o ne -tim e tr a nsa ctio n e xp ense s a nd o th er s p ecia l it e m s d ete rm in ed b y m anagem ent, in clu din g, b ut n ot
lim it e d to c e rta in lo ss c o ntin gency a ccru als a n d r e str u ctu rin g c h arg es, a s th ey a re n ot in dic a tiv e o f b usin ess o pera tio ns.
T he C om pa ny d oes n ot p ro vid e a re co ncilia tio n fo r n o n-G AAP e stim ate s o n a fo rw ard -lo okin g b asis a s it is u nable to p ro vid e a m eanin gfu l
ca lc u la tio n o r e stim atio n o f r e co ncilin g it e m s a nd th e in fo rm atio n is n ot a va ila ble w it h o ut u nre aso nable e ff o rt. T his is d ue to th e in here nt d if f ic u lt y
o f fo re ca stin g th e tim in g o r a m ount o f v a rio us it e m s th at w ou ld im pact th e m ost d ir e ctly c o m para ble fo rw ard -lo okin g U .S . G AAP fin ancia l
m easu re s th at h ave n o t y e t o ccu rre d, a re o u t o f th e C om pany’s c o ntr o l a n d/o r c a nnot b e re aso nably p re dic te d. F orw ard -lo okin g n on-G AAP
fin ancia l m easu re s p ro vid ed w it h out th e m ost d ir e ctly c o m para ble U .S . G AAP fin a ncia l m easu re s m ay v a ry m ate ria lly fr o m th e c o rre sp ondin g
U .S . G AAP fin ancia l m easu re s.
F orw ard -L ookin g S ta te m en ts
T his p re ss re le ase in clu des “fo rw ard -lo okin g sta te m ents ” w it h in th e m eanin g o f th e “s a fe h arb or” p ro vis io ns o f th e U nit e d S ta te s P riv a te
S ecu rit ie s L it ig atio n R efo rm A ct o f 1 995. T he C om pany’s a ctu al re su lt s m ay d if f e r fr o m it s e xp ecta tio ns, e stim ate s, a nd p ro je ctio ns a nd,
co nse quently , y o u s h ould n ot re ly o n th ese fo rw ard -lo okin g s ta te m ents a s p re dic tio ns o f fu tu re e ve nts . W ord s s u ch a s “e xp ect,” “e stim ate ,”
“ p ro je ct,” “ b udget,” “ fo re ca st,” “ a ntic ip ate ,” “ in te nd,” “ p la n,” “ m ay,” “ w ill, ” “ c o uld ,” “ s h ould ,” “ b elie ve s,” “ p re dic ts ,” “ p ote ntia l, ” “ c o ntin ue,” a nd s im ila r
exp re ssio ns ( o r th e n egativ e v e rs io ns o f s u ch w ord s o r e xp re ssio ns) a re in te nded to id entif y s u ch fo rw ard -lo okin g s ta te m ents .
T hese fo rw ard -lo okin g s ta te m ents in vo lv e s ig nif ic a nt ris ks a nd u nce rta in tie s th at c o uld c a use th e C om pany’s a ctu al re su lt s to d if f e r m ate ria lly
f r o m th ose d is cu sse d in th e fo rw ard -lo okin g s ta te m ents . M ost o f th ese fa cto rs a re o uts id e o f th e C om pany’s c o ntr o l a nd a re d if f ic u lt to p re dic t.
F acto rs th at m ay c a use s u ch d if f e re nce s in clu de, b ut a re n ot lim it e d to , th e a bilit y o f S killz to : e ff e ctiv e ly c o m pete in th e g lo bal e nte rta in m ent a nd
gam in g in dustr ie s; a ttr a ct a nd r e ta in s u cce ssfu l r e la tio nsh ip s w it h th e th ir d p a rty d e ve lo pers w ho d eve lo p a nd u pdate th e g am es h oste d o n S killz ’
p la tfo rm ; d riv e b ra nd a w are ness w it h

end u se rs ; in ve st in g ro w th a nd d eve lo pm ent o f e m plo ye es; c o m ply w it h la w s, r e gula tio ns a nd e xp ecta tio ns a pplic a ble to it s b usin ess, in clu din g
w it h re sp ect to c yb ers e cu rit y a nd c o rp ora te g ove rn ance m atte rs ; m it ig ate th e c o m merc ia l, re puta tio nal a nd re gula to ry ris ks to o ur b usin ess;
re m edia te d urin g fis ca l y e ar 2 024 c e rta in n on- fu lly re m edia te d m ate ria l w eakn esse s in o ur in te rn al c o ntr o ls o ve r fin ancia l re portin g; a nd
eff e ctiv e ly re so lv e u nce rta in tie s a sso cia te d w it h th e re so lu tio n o f o u r o n goin g lit ig a tio n w it h V oodoo S AS, P apaya G am in g, a nd o th er lit ig atio n
m atte rs . A ddit io nal fa cto rs th at m ay c a use s u ch d if f e re nce s in clu de o th er ris ks a nd u nce rta in tie s in dic a te d fr o m tim e to tim e in th e C om pany’s
S EC filin gs, in clu din g th ose u nder “ R is k F acto rs ” th ere in , w hic h a re a va ila ble o n th e S EC ’s w ebsit e a t w ww.s e c.g ov. A ddit io nal in fo rm atio n w ill b e
m ade a va ila ble in o th er filin gs th at th e C om pany m ake s fr o m tim e to tim e w it h th e S EC . In a ddit io n, a ny fo rw ard -lo okin g s ta te m ents c o nta in ed in
t h is p re ss re le ase a re b ase d o n a ssu m ptio ns th at th e C om pany b elie ve s to b e re aso nable a s o f th is d ate . T he C om pany u nderta ke s n o
oblig atio n to u pdate a ny fo rw ard -lo okin g s ta te m ents to re fle ct e ve nts o r c ir c u m sta nce s a fte r th e d ate o f th is p re ss re le ase o r to re fle ct n ew
in fo rm atio n o r th e o ccu rre nce o f u nantic ip ate d e ve nts , e xce pt a s r e quir e d b y la w .
C onta cts :
In ve sto rs : ir@skillz.com
o r
Ja m es L eahy, R ic h ard L and
JC IR
( 2 12) 8 35-8 500 o r sklz@jcir .com
Media : press@skillz.com

Skillz In c.
C onso lid ate d S ta te m en ts o f O pera tio ns a n d C om pre h en siv e L oss ( U nau dit e d )
(in th ousa nds, e xce pt fo r n um ber o f s h a re s a nd p er s h a re a m ou nts )
T hre e M onth s E nded S ep te m ber 3 0, N in e M onth s E nded S ep te m ber 3 0,
2024 2023 2024 2023
R even ue $ 24,5 64 $ 36,4 27 $ 75,0 94 $ 120,9 75
C osts a nd e xp ense s:
C ost o f r e ve nue 3,3 73 3,6 93 10,1 71 11 ,9 23
R ese arc h a nd d eve lo pm ent 4,7 42 7,8 52 13,6 38 24,7 57
S ale s a nd m ark e tin g 19,2 94 31,9 25 61,1 38 99,5 10
G enera l a nd a dm in is tr a tiv e 1 8,1 47 24,3 89 58,4 19 78,0 80
G ain fr o m lit ig atio n s e ttle m ent — — (4 6,0 00) —
Im pair m ent o f in ta ngib le a sse ts a nd o th er
ch arg es — — — 455
To ta l c o sts a n d e xp en ses 45,5 56 67,8 59 97,3 66 214,7 25
L oss f r o m o pera tio ns (2 0,9 92) (3 1,4 32) (2 2,2 72) (9 3,7 50)
G ain fr o m e xtin guis h m ent o f d ebt — — — 15,2 05
In te re st in co m e ( e xp ense ), n et 242 (2 ,2 79) 688 (7 ,4 86)
C hange in fa ir v a lu e o f c o m mon s to ck w arra n t
lia bilit ie s — 127 11 278
O th er in co m e ( e xp ense ), n et (3 33) 48 (7 8) 98
L oss b efo re in co m e t a xes (2 1,0 83) (3 3,5 36) (2 1,6 51) (8 5,6 55)
P ro vis io n fo r in co m e ta xe s 32 9 142 193
N et lo ss $ (2 1,1 1 5) $ (3 3,5 45) $ (2 1,7 93) $ (8 5,8 48)
E arn in gs ( lo ss) p er s h are :
B asic a nd d ilu te d $ (1 .2 0) $ (1 .5 7) $ (1 .2 2) $ (4 .0 5)
W eig hte d a ve ra ge s h are s o uts ta ndin g:
B asic a nd d ilu te d 17,5 31,7 90 21,3 05,4 70 17,9 28,0 62 21,1 75,7 97
O th er c o m pre hensiv e in co m e:
C hange in u nre aliz e d g ain o n a va ila ble -fo r-s a le
in ve stm ents , n et o f ta x 1 135 7 1,5 26
To ta l o th er c o m pre hensiv e in co m e 1 135 7 1,5 26
To ta l c o m pre hensiv e lo ss $ (2 1,1 1 4) $ (3 3,4 10) $ (2 1,7 86) $ (8 4,3 22)

Skillz In c.
C onso lid ate d B ala n ce S heets ( U nau d it e d )
(in th ousa nds, e xce pt fo r n um ber o f s h a re s a nd p ar v a lu e p er s h a re a m ou nts )
September 30, 2024 December 31, 2023
Assets
Current assets:
Cash and cash equivalents $ 301,443 $ 302,028
Restricted cash 10,000 10,000
Accounts receivable, net of allowance for credit losses of $62 and $49 as of September 30,
2024 and December 31, 2023, respectively 5,272 5,942
Prepaid expenses and other current assets 5,103 6,721
Total current assets 321,818 324,691
Property and equipment, net 14,877 14,549
Marketable securities, non-current — 1,125
Non-marketable equity securities 52,768 52,768
Other non-current assets 723 2,693
Total assets $ 390,186 $ 395,826
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 8,666 $ 1,712
Operating lease liabilities, current 1,311 1,364
Other current liabilities 45,556 46,782
Total current liabilities 55,533 49,858
Operating lease liabilities, non-current 9,564 10,573
Common stock warrant liabilities, non-current — 11
Long-term debt, net of current portion 125,204 123,935
Other non-current liabilities 422 960
T otal liabilities 190,723 185,337
Commitments and contingencies
Stockholders’ equity:
Common stock $0.0001 par value; 31.3 million shares authorized; Class A common stock – 25.0
million shares authorized; 18.6 million and 18.1 million shares issued; 14.4 million and 15.8
million outstanding as of September 30, 2024 and December 31, 2023, respectively; Class B
common stock – 6.3 million shares authorized; 3.4 million shares issued and outstanding as of
September 30, 2024 and December 31, 2023 1 1
Treasury stock at cost, 4.1 million and 2.3 million as of September 30, 2024 and December 31,
2023, respectively (23,905) (13,000)
Additional paid-in capital 1,219,628 1,197,963
Accumulated other comprehensive loss — (7)
Accumulated deficit (996,261) (974,468)
Total stockholders’ equity 199,463 210,489
Total liabilities and stockholders’ equity $ 390,186 $ 395,826

Skillz In c.
C onso lid ate d S ta te m en t o f C ash F lo w s ( U nau dit e d )
(in th ousa nds)
N in e M onth s E nded S ep te m ber 3 0,
2024 2023
O pera tin g A ctiv it ie s
N et lo ss $ (2 1,7 93) $ (8 5,8 48)
A dju stm ent to r e co ncile n et lo ss to n et c a sh p ro vid ed b y ( u se d in ) o pera tin g a ctiv it ie s:
D epre cia tio n a nd a m ortiz a tio n 1,1 88 1,8 58
S to ck-b ase d c o m pensa tio n 22,8 94 33,6 10
G ain fr o m e xtin guis h m ent o f d ebt — (1 5,2 05)
A ccre tio n o f u nam ortiz e d d ebt d is co unt a nd a m ortiz a tio n o f d ebt is su ance c o sts 1 ,2 69 1,8 15
A m ortiz a tio n o f p re m iu m fo r m ark e ta ble s e cu rit ie s — 839
Im pair m ent c h arg es — 455
C hange in fa ir v a lu e o f c o m mon s to ck w arra n t lia bilit ie s (1 1 ) (2 78)
N onca sh o pera tin g le ase c o sts — 17
C hanges in o pera tin g a sse ts a nd lia bilit ie s:
A cco unts r e ce iv a ble , n et 670 (2 ,0 88)
P re paid e xp ense s a nd o th er a sse ts 3 ,5 88 (1 ,8 83)
A cco unts p aya ble 6 ,9 54 699
O pera tin g le ase lia bilit ie s (1 ,0 62) (1 ,7 32)
O th er a ccru als a nd lia bilit ie s (1 ,2 74) 8,2 55
N et c ash p ro vid ed b y ( u sed in ) o pera tin g a ctiv it ie s 12,4 23 (5 9,4 86)
In vestin g A ctiv it ie s
P urc h ase s o f p ro perty a nd e quip m ent, in clu din g in te rn al- u se s o ftw are d eve lo pm ent (1 ,3 17) (1 2,0 81)
S ettle m ent o f lo an r e ce iv a ble — (2 ,0 00)
P urc h ase s o f m ark e ta ble s e cu rit ie s (5 ) —
Pro ce eds fr o m s a le s o f m ark e ta ble s e cu rit ie s 1 ,1 37 56,5 99
P ro ce eds fr o m m atu rit ie s o f m ark e ta ble s e cu rit ie s — 121,2 26
N et c ash p ro vid ed b y ( u sed in ) in vestin g a c tiv it ie s (1 85) 163,7 44
F in an cin g A ctiv it ie s
P rin cip al p aym ents o n fin ance le ase s o blig atio n s (6 82) (8 07)
P aym ents fo r e xtin guis h m ent o f d ebt — (1 35,8 55)
R epurc h ase o f c o m mon s to ck (1 0,9 05) —
Paym ents to c o ve r ta xe s u pon e xe rc is e o f s to ck o ptio ns a nd is su ance o f c o m mon
sto ck (1 ,2 36) —
Pro ce eds fr o m e xe rc is e o f c o m mon s to ck w arra nts , n et o f r e dem ptio ns — 46
N et c ash u sed in f in an cin g a ctiv it ie s (1 2,8 23) (1 36,6 16)
N et c h ange in c a sh , c a sh e quiv a le nts a nd r e str ic te d c a sh (5 85) (3 2,3 58)
C ash , c a sh e quiv a le nts a nd r e str ic te d c a sh  –  b egin nin g o f y e ar 312,0 28 365,4 36
C ash , c ash e q uiv ale n ts a n d r e str ic te d c as h  –  e n d o f p erio d $ 311 ,4 43 $ 333,0 78
S upple m en ta l c ash f lo w d ata :
C ash p aid d urin g th e p erio d fo r:

Skillz In c.
C onso lid ate d S ta te m en t o f C ash F lo w s ( U nau dit e d )
(in th ousa nds)
In te re st $ 6 ,7 26 $ 12,2 61
Ta xe s $ 183 $ 200

Skillz In c.
R eco ncilia tio n o f G AAP N et L oss t o A dju ste d E B IT D A ( U nau dit e d )
(in th ousa nds)
T hre e M onth s E nded S ep te m ber 3 0, N in e M onth s E nded S ep te m ber 3 0,
2024 2023 2024 2023
N et lo ss $ (2 1,1 1 5) $ (3 3,5 45) $ (2 1,7 93) $ (8 5,8 48)
In te re st in co m e ( e xp ense ), n et (2 42) 2,2 79 (6 88) 7,4 86
S to ck-b ase d c o m pensa tio n 6,7 21 12,4 40 22,8 94 33,6 10
C hange in fa ir v a lu e o f c o m mon s to ck w arra n t
lia bilit ie s — (1 27) (1 1 ) (2 78)
P ro vis io n fo r in co m e ta xe s 32 9 142 193
D epre cia tio n a nd a m ortiz a tio n 389 486 1,1 88 1,8 58
G ain fr o m e xtin guis h m ent o f d ebt — — — (1 5,2 05)
G ain fr o m lit ig atio n s e ttle m ent — — (4 6,0 00) —
Oth er in co m e ( e xp ense ), n et 333 (4 8) 78 (9 8)
Im pair m ent c h arg es — — — 455
A dju ste d E BIT D A $ (1 3,8 82) $ (1 8,5 06) $ (4 4,1 90) $ (5 8,2 82)
1) F or th e n in e m onth s e nded S epte m ber 3 0, 2 024, a m ount r e pre se n ts c e rta in fu nds r e ce iv e d a s p art o f th e s e ttle m ent w it h A via G am es.
(1 )

Skillz In c.
R eco ncilia tio n o f G AAP t o N on-G AAP O pera tin g E xp en ses
(in th ousa nds)
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
R ese arc h a nd d eve lo pm ent $ 4,7 42 $ 7,8 52 $ 13,6 38 $ 24,7 57
Less: s to ck-b ase d c o m pensa tio n (3 22) (1 ,4 15) (6 51) (3 ,5 81)
N on-G AAP r e se arc h a nd d eve lo pm ent $ 4,4 20 $ 6,4 37 $ 12,9 87 $ 21,1 76
S ale s a nd m ark e tin g $ 19,2 94 $ 31,9 25 $ 61,1 38 $ 99,5 10
Less: s to ck-b ase d c o m pensa tio n (1 ,0 86) (2 ,4 82) (4 ,8 85) (6 ,4 78)
N on-G AAP s a le s a nd m ark e tin g $ 18,2 08 $ 29,4 43 $ 56,2 53 $ 93,0 32
G enera l a nd a dm in is tr a tiv e $ 1 8,1 47 $ 24,3 89 $ 58,4 19 $ 78,0 80
Less: s to ck-b ase d c o m pensa tio n (5 ,3 09) (8 ,5 43) (1 7,3 51) (2 3,5 51)
N on-G AAP g enera l a nd a dm in is tr a tiv e $ 1 2,8 38 $ 15,8 46 $ 41,0 68 $ 54,5 29

Skillz In c.
S upple m en ta l F in an cia l In fo rm atio n
Thre e M onth s E nded S ep te m ber 3 0, N in e M onth s E nded S ep te m ber 3 0,
2024 2023 2024 2023
Gross marketplace volume (“GMV”) (000s)(1) $ 158,238 $ 241,146 $ 481,169 $ 774,007
Paying monthly active users (“PMAUs”) (000s)(2) 121 168 121 193
Monthly active users (“MAUs”) (000s)(3) 845 1,038 837 1,094
A verage GMV per paying monthly active user(4) $ 435.9 $ 478.8 $ 441.8 $ 446.2
Average GMV per monthly active user(5) $ 62.4 $ 77.5 $ 63.9 $ 78.6
Average revenue per paying monthly active user
(“ARPPU”)(6) $ 67.6 $ 72.3 $ 68.9 $ 69.9
Average revenue per monthly active user (“ARPU”)(7) $ 9.7 $ 11.7 $ 10.0 $ 12.3
Paying MAU to MAU ratio 14% 16% 14% 18%
A verage end-user incentives, included as sales and
marketing expense, per paying active user(8) $ 28.0 $ 33.6 $ 27.1 $ 29.8
Average end-user incentives, included as sales and
marketing expense, per playing active user(9) $ 4.0 $ 5.4 $ 3.9 $ 5.2
(1 ) “ G M V” o r “ G ro ss M ark e tp la ce V olu m e” m eans th e to ta l e ntr y fe es p aid b y u se rs fo r c o n te sts h oste d o n S killz ’ p la tfo rm . T o ta l e ntr y fe es in clu de e ntr y fe es p aid b y e nd-u se rs u sin g
ca sh d epo sit s , p rio r w in nin gs fr o m e n d-u se rs ’ a cco unts th at h ave n ot b een w it h dra w n, a nd e n d-u se r in ce n tiv e s u se d to e nte r p aid e ntr y fe e c o n te sts .
(2 ) “ P ayin g M onth ly A ctiv e U se rs ” o r “ P M AU s” m eans th e n um be r o f e nd-u se rs w ho e nte re d in to a p aid c o n te st h oste d o n S killz ’ p la tfo rm a t le ast o nce in a m onth , a ve ra ged o ve r
each m onth in th e p erio d.
(3 ) “ M onth ly A ctiv e U se rs ” o r “ M AU s” m eans th e n um ber o f p la yin g e nd-u se rs w ho e nte re d in to a p aid o r fr e e c o nte st h oste d o n S killz ’ p la tfo rm a t le ast o nce in a m onth , a ve ra ged
ove r e ach m onth in th e p erio d.
(4 ) “ A ve ra ge G M V P er P ayin g M onth ly A ctiv e U se r” m ea ns th e a ve ra ge G M V in a g iv e n m on th d iv id ed b y P ayin g M AU s in th at m onth , a ve ra ged o ve r th e p erio d.
(5 ) “ A ve ra ge G M V P er M onth ly A ctiv e U se r” m eans th e a ve ra ge G M V in a g iv e n m on th d iv id ed b y M AU s in th at m onth , a ve ra ged o ve r th e p erio d.
(6 ) “ A ve ra ge R eve nue P er P ayin g M onth ly A ctiv e U se r” o r “ A R PPU ” m ea ns th e a ve ra ge r e ve n ue in a g iv e n m onth d iv id ed b y P ayin g M AU s in th at m onth , a ve ra ged o ve r th e p erio d
and d oes n ot in clu de a d eductio n fo r e nd-u se r in ce ntiv e s th at a re in clu ded in s a le s a nd m ark e tin g e xp e nse .
(7 ) “ A ve ra ge R eve nue P er M onth ly A ctiv e U se r” o r “ A R PU ” m ea ns th e a ve ra ge r e ve n ue in a g iv e n m on th d iv id ed b y M AU s in th at m onth , a ve ra ged o ve r th e p erio d a nd d oes n ot
in clu de a d eductio n fo r e nd-u se r in ce ntiv e s th at a re in clu ded in s a le s a nd m ark e tin g e xp e nse .
(8 ) A m ount r e fle cts th e a ve ra ge e nd-u se r in ce ntiv e s in clu ded in s a le s a nd m ark e tin g e xp e nse in a g iv e n m on th d iv id ed b y P M AU s in th at m onth , a ve ra ged o ve r th e p erio d.
(9 ) A m ount r e fle cts th e a ve ra ge e nd-u se r in ce ntiv e s in clu ded in s a le s a nd m ark e tin g e xp e nse in a g iv e n m on th d iv id ed b y M AU s in th at m onth , a ve ra ged o ve r th e p erio d.